Last week we reported that Facebook is in advanced talks to buy Israel-born social traffic and mapping app Waze for up to $1 billion, but that there were still some questions over whether Waze’s R&D efforts would remain in their home country, or move to Facebook’s HQ in California. Haaretz has now advanced the story, saying that the current deal has it that Waze’s R&D will stay in Israel, where it will also continue to be a registered, tax-paying company, while Waze’s Palo Alto office will move over to Facebook and Menlo Park. While reports are now swirling that Apple could still come into the negotiating room again (if you believe Apple was ever there in the first place), the deal raises some interesting details and debate about what is happening in the Israeli startup scene currently.
In a country more renowned for its B2B and technical exits — Cisco’s $5 billion NDS deal being one example from last year, but so are Facebook’s two previous Israeli acquisitions, feature phone interface designer Snaptu and facial recognition company Face.com — this is one of the first big consumer tech exits in Israel. Yaron Samid, founder of the Israeli tech startup network TechAviv and himself a serial entrepreneur, notes that this is in fact the first $1 billion exit for such a company. Waze’s rapid rise over the last couple of years, he notes, has already been having an impact on the community, with the exit being the final flourish.
“The inspiration has already taken hold like wildfire among the countless Israeli founders who’ve been told that they can’t produce a billion-dollar consumer Internet/Mobile company – and now know that they all can,” he writes. (He also takes the opportunity for a little self promotion, claiming that he’d been one of those suggesting current CEO Noam Bardin after he couldn’t take the job himself.)
There are numerous Israeli Startups that could get a lift from the ‘new order’ where consumer startups, not just B2B and enterprise, can emerge from the country. These could include Wix, GetTaxi, Fiverr, Bizzabo, MyHeritage, Wishi and Mobli, among others.
Facebook Israel foothold
The other interesting development here is that this could give Facebook a foothold into the Israeli tech world. Unlike Google, Facebook does not have an operation in Israel, which could well create useful ‘boots on the ground’ in a nation renowned for its engineering talent. This would make it the second Facebook development arm outside the U.S., after London.
But the suggestion so far is that Waze will remain an independent company operating in Israel, with R&D staying in Israel, while the business side, including CEO Noam Bardin, is expected to move over to Facebook U.S. HQ.
But, there is a cultural clash on the horizon here.
Some local players are already coming out against this idea. Local VC and TechCrunch contributor Roi Carthy says he would like to see Facebook shutter Waze’s local presence, and relocate the tech personnel to Palo Alto.
Because, he says, although the Waze R&D center could be a beach-head for a full-blown Facebook R&D shop, and thus good for Facebook, “it could have catastrophic effects upon local early stage startups’ ability to compete on salaries and benefits.”
His argument is that if a big company like Facebook stays away, then the Israeli tech ecosystem is more likely to be able to “push more innovation” towards Silicon Valley, which would be in the “best interest of both the local startup industry and Facebook.”
Certainly, such a large acquisition inside such a relatively small country could well change the successful dynamics of the Israeli eco-system. If it became a mere engineering centre for Facebook, Apple and Google, the implication is that we might not see quite the same levels of startup activity as we’ve seen emerge in the past from Israel.
That is almost certainly overstating the ‘problem’. It’s more likely that the experience of being inside these big tech companies in Israel is more likely to create a virtuous circle of new entrepreneurs, spin-outs and new projects. Plus, more eyes and ears on the ground for potential acquisitions.
Haaretz is also reporting some details about the financial terms of the deal. Anywhere from 40 percent to 60 percent of the $1 billion price (the current offer) will be in Facebook shares, with the rest in cash. Israeli investors woud prefer more cash; others prefer Facebook shares. Specific investors like Li Ka-Shing will land $116 million from the deal after investing $30 million via the Horizon Ventures Fund along with Kleiner Perkins less than two years ago. Microsoft will pull in $102 million after investing of $25 million in December 2010.
E-commerce giant Amazon looks like it is gearing up for the latest chapter in its international expansion: an operation in Russia. According to this article in Forbes (in Russian) the company has opened its first office in the country, headed by Arkady Vitrouk. Vitrouk is the former general director of ABC-Atticus, a publishing group owned by media baron Alexander Mamut.
Forbes cites unnamed sources but notes that the appointment, and the office opening, have not been confirmed by Amazon itself. However, we’ve discovered that Vitrouk’s LinkedIn profile does confirm him as director of Kindle Content for Amazon in Russia.
Looking a little closer, Amazon is hiring for at least three other positions for Russia specifically for its Kindle business and the sourcing of local content: a senior product manager for Kindle content pricing, and a principal for content acquisition for Kindle Russia, and another content acquisition manager.
A visit to amazon.ru currently redirects to the company’s main page for Europe, with links to other countries’ local sites, including the UK, France, Spain, German and Italy. We have contacted Amazon and Vitrouk himself for more detail and will update this story as we learn more.
The news comes in the same week that Amazon announced that it would take its Appstore business international — extending it to nearly 200 countries, another sign of how the company is gearing up for more scale. It also follows reports (again unconfirmed) that Barnes & Noble is also preparing for more Nook activity in Russia.
Russia is currently Europe’s largest internet market, according to a recent study from comScore, with an online audience of 61.3 million users.
That, combined with Russia’s rapidly rising middle class, has led to a boom in e-commerce. Morgan Stanley believes the Russian e-commerce market will be worth $36 billion by 2015, up from $12 billion in 2012.
Russia has been a noticeable hole in Amazon’s footprint, but that has spelled opportunity for local players, too.
As we’ve pointed out before, this is especially important in a country like Russia, which doesn’t have a solid, extenstive pre-existing delivery infrastructure that spans across the whole of the huge country.
That, and the lack of credit card penetration, has meant that companies like Ozon and fashion/home goods site KupiVIP (itself flush with $120 million of funding) have built out fleets of their own delivery trucks, with drivers who take cash on delivery for goods (KupiVIP, focusing on clothes, will even wait until the recipient tries something on, so that the item can also get returned on the spot if it’s unsuitable).
Ozon’s business has been built on its extensive logistics network to deliver a soup-to-nuts range of goods, but it has not ruled out doing more in cloud services. However it seems less interested in Kindle-style products like tablets, e-readers and digital content.
This could be one route to how Amazon decides to tackle Russia, at least in part. In that sense, it’s interesting that the Forbes report specifically names as the head of Amazon in Russia someone whose immediate experience lies precisely in publishing, rather than e-commerce or retail, and that he’s already heading up business for the company there in that vein.
P.S. I write “at least in part,” because it turns out that Amazon is also hiring for other Russia-related expansion plans. Fashion e-commerce site Shopbop, owned by Amazon, is seeking a marketing manager for a new rollout in Russia. Amazon has also been headhunting in Moscow for software engineers — although these would be for relocation to Seattle.
Leaders from Facebook, Google, and other tech giants today announced they’re banding together to form a political advocacy group called FWD.us, designed to promote policies that will keep the American workforce competitive. The bipartisan group’s first priority is pushing for comprehensive immigration reform, but it will also support education reform and scientific research.
Leaked information about Facebook CEO Mark Zuckerberg’s involvement in the formation of the group, pronounced “Forward U.S.”, was first published two weeks ago by the San Francisco Chronicle. But now FWD.us campaign manager Rob Jesmer tells TechCrunch it’s formally launching. It’s activities will include engaging the tech community in online advocacy, policy and fundraising.
Zuckerberg published an op-ed in the Washington Post this morning describing the group’s mission “to build the knowledge economy the US needs to ensure more jobs, innovation and investment.”
The hope of FWD.us is that by easing immigration for foreign talent, enticing native entrepreneurs to stay in the country, and improving education, the American economy and people will prosper. By pooling their considerable wealth and influence, the group’s members can better support candidates and lobby for legislation that could fix the broken policies impeding the country’s success. Though the businesses of FWD.us members stand to benefit from improved domestic education and easier visas for foreign talent, the group insists the real beneficiaries are American workers and students.
Former Causes and NationBuilder co-founder and current Andreessen Horowitz entrepreneur in residence Joe Green will serve as the president of FWD.us, which will operate as a 501(c)(4) non-profit social welfare organization that can receive unlimited donations. Green says “People in tech have often felt a cultural disconnect from the political process, which is a shame considering we are naturally idealistic; you often hear tech founders talk about how their motivation to create companies and products is to change the world. Our goal with FWD.us is to organize and engage the tech community in the issues where we can contribute to the national debate.”
Founders of FWD.us include Zuckerberg, Green, Aditya Agarwal (Dropbox), Jim Breyer (Accel Partners), Matt Cohler (Benchmark), Ron Conway (SV Angel), John Doerr (Kleiner Perkins Caufield & Byers), Reid Hoffman (Greylock/LinkedIn), Drew Houston (Dropbox), Chamath Palihapitiya (The Social+Capital Partnership), and Ruchi Sanghvi (Dropbox).
Amongst its major contributors are Brian Chesky (Airbnb), Chris Cox (Facebook), Paul Graham (Y Combinator), Reed Hastings (Netflix), Chad Hurley (AVOS/YouTube) Josh James (Domo/Omniture), Max Levchin (PayPal/Yelp), Joe Lonsdale (Palantir), Andrew Mason (Groupon), Marissa Mayer (Yahoo), Mary Meeker (Kleiner Perkins Caufield & Byers), Dave Morin (Path), Elon Musk (Tesla/SpaceX), Hadi Partovi (Code.org), Alison Pincus (One Kings Lane), Mark Pincus (Zynga), Keith Rabois (Khosla Ventures), Hosain Rahman (Jawbone), David Sacks (Yammer), Eric Schmidt (Google), Kevin Systrom (Instagram), Padmasree Warrior (Cisco), and Fred Wilson (Union Square Ventures). They’ll all be participating as individuals, and not representing or drawing on resources of their companies. A full list of the FWD.us staff can be found in the press release attached below which will go out later this morning.
Some of the founders and contributors have participated or fundraised for political causes or candidates before, and a few of their companies including Facebook have their own political action committees and spend millions on lobbying efforts. What’s unique about FWD.us is the shear magnitude of their combined power, and the idea that its being harnessed for a bipartisan agenda.
Jesmer tells TechCrunch that FWD.us plans to spring into action immediately, as the Senate Judiciary Committee will hold a hearing on immigration reform on April 17. FWD.us is expected to support the Gang Of Eight legislation, which includes a pathway to citizenship, much tougher border security, and guest worker programs for low- and high-skilled talent. Immigration reform, including easier access to H-1B temporary visas could help solve the talent crisis facing Silicon Valley. Right now it’s difficult for tech companies to bring in talent from overseas, and it can be tough for foreign entrepreneurs to set up companies and create jobs in the United States.
Beyond immigration, FWD.us plans to campaign for policies that will produce more math, science, and technology graduates, and ensure every child gains a great education from high-quality teachers in accountable schools. It will also support scientific research to foster innovation and technological breakthroughs. These projects could create new jobs in America, and boost engineering instruction so thee next generation has a place in the world economy which is increasingly going digital.
Zuckerberg sums up the need for FWD.us, saying “In a knowledge economy, the most important resources are the talented people we educate and attract to our country. A knowledge economy can scale further, create better jobs and provide a higher quality of living for everyone in our nation.To lead the world in this new economy, we need the most talented and hardest-working people. We need to train and attract the best.”
To join with FWD.us and receive information on its initiatives, sign up on its web page
When Sequoia Capital India landed in Singapore quietly in 2012, the buzz around town was that a big-name US fund being in the country was going to really jolt the market and provide serious cred to the startups here.
The Indian team running operations here, however, appears to have spent the last year of its time in the island state helping startups in its India portfolio expand into Singapore, rather than directly investing in startups here.
However, the company just moved into a fancy new co-working space called The Co, and is its anchor tenant, so it could be a sign that it’s trying to get closer to local startups. Previously, it operated out of a service office in High Street.
Singapore is a popular choice as a base for foreign companies looking to expand into Southeast Asia, because it’s a mature market with plenty of infrastructure available. But as a tiny country, it’s not often the main addressable user base, and startups originating from Singapore are also taught to have expansion plans charted. Early last year, Sequoia Capital India MD, Shailendra Jit Singh, expressed interest in having the fund’s companies expand into the region. Sequoia Cap in the US also appeared to have been eyeing activity in Singapore for a while—it had its first offsite meeting in the country in 2011, and was in discussion with Singaporean Prime Minister Lee Hsien Loong about its presence here.
The Prime Minister’s Office oversees its R&D arm, the National Research Foundation (NRF), which has been busy backing local venture capital firms here over the past few years. Its Technology Incubation Scheme is a program that distributes seed funding to startups picked by 11 NRF-appointed VCs. The NRF matches investment values in the proportion of 85 percent to 15 percent—the larger portion dished out by the government. This allows the VCs here to provide bigger sums of seed capital to startups, with much of the risk absorbed by the NRF.
Former NRF projects head, Yinglan Tan, was also pulled over to Sequoia Capital India’s team in July last year, where he is now a venture partner based in Singapore.
When I ran into Tan in Manila a couple of months ago, he was evasive about Sequoia’s activities in Singapore, but was happy to try to set up meetings with their existing portfolio companies in Singapore—all Indian-based startups, except for Airbnb and Evernote. Some of these companies that are being incubated in Singapore by Sequoia Cap include Via, Druva, Mu Sigma, Idea Device and Practo.
Two months on, those meetings have yet to happen, but word on the street is that Tan has been meeting with some Singapore-based startups that are looking to raise Series A or B rounds, and are looking to expand beyond the island. One that I know of provides Wi-Fi infrastructure.
As for its current startups here, Via is pretty sizable. It operates a flight booking portal similar to Expedia and Zuji, and has about 1,200 employees, the bulk of which are in India, with some in Indonesia and another team in the Philippines. It also lists hotels, and has about 45,000 listings, with plans to add more.
Druva started in Pune, India and is now operationally HQed in Sunnyvale, according to Jaspreet Singh, its CEO and founder. The company provides a backup system for mobile devices in the enterprise.
Idea Device is also a Bangalore startup, and makes a runbook automation system. Runbook automation is a set of technologies that helps take out some of the manual system administration tasks for IT departments.
Sequoia Cap US declined to comment further on its plans for Singapore.
Here is the original post: Sequoia Capital In Singapore After A Year, Has Yet To Invest In A Local Startup
We’re fast approaching Disrupt NY, TechCrunch’s big conference in the Big Apple taking place April 29-May 1 at the Manhattan Center. This year’s event promises to be one of the most international yet, with the Startup Alley featuring three country pavilions, focusing on Brazil, India and Israel, and we’re on the lookout for exciting startups from these three countries and the rest of the world to be a part of the action.
Startup Alley is the boisterous, buzzy complement to what happens on Disrupt’s main stage, with its usual lineup of killer speakers and the Startup Battlefield. The Alley is where people mingle, scope out and network; and with a daily, rotating list of startups exhibiting in the Alley, it’s the perfect platform for our country spotlights.
Brazil, India and Israel are without question three of the world’s most important tech hubs outside of Silicon Valley. With their supersized populations of digital consumers, Brazil and India typify some of the most exciting elements of emerging economy market growth. And while Israel is significantly smaller, it provides an anchor for what is happening in the wider Middle East/north African region.
But it’s not just a simple numbers game: all three countries are also pushing the envelope on some of the coolest innovations in technology and engineering.
This combination of these two currents is driving a lot of activity that is increasingly helping the three countries gain an international profile in terms of new business and investment.
For the India pavilion, TechCrunch is teaming up with the Internet and Mobile Association of India (IAMAI); and Initial:Capital will be bringing startups from Israel and Brazil to the event. If you are a startup from one of these three places, less than two years old and with under $2.5 million in funding, the Pavilions at Disrupt NY are your chance to shine and show off how you are prime examples of why your countries are forces to be reckoned with in the tech world.
In addition to these three country pavilions, we’re still accepting applications for qualifying startups from anywhere to come and show off their stuff by applying to exhibit in the wider Startup Alley itself. (As with the pavilions, you need to be less than two years old and have less than $2.5 million in funding.)
Everyone in the Alley, including the Pavilions, gets a cocktail table to demo for one day. Those who exhibit in the Alley get two tickets for the entire 3-day event and afterparties, and a chance to compete for the Audience Choice Award — a fast track to joining the Battlefield to present your startup on the main stage and compete for the $50,000 grand prize.
We’re especially excited about the international pavilions for a couple of reasons. We love the idea of showcasing how the startup world is about a lot more than just what’s happening in Silicon Valley — something that those of us who live outside the Bay Area know well but often feel is under-represented in wider tech discourse (and all the business that goes along with that).
This is not a fleeting idea. It’s something we’ve been pushing hard in our U.S. city tours in the past year, and it’s equally an important trend worldwide. This is a large part of why we’re launching a new Disrupt event this year — pointedly, in another major hub for tech startups outside of the U.S.: Berlin, Germany. That will be taking place 26-29 October, and we’re laying the groundwork already. Go here if you want to get involved.
Accelerators, VCs and industry/government associations who would like to partner with us and bring a group of startups either to Disrupt NY or Disrupt Berlin, please email Jamie Quiocho.
Our sponsors help make Disrupt happen. If you are interested in learning more about sponsorship opportunities, please contact our amazing sponsorship team here firstname.lastname@example.org.